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random drive by AIG moment
A couple of days ago I was talking about how the market, as far as I can tell, is schizophrenic.
Example:
American International Group (AIG) is currently being raked fore and aft over that entire messy bonus issue. Late last week, it traded at less than fifty cents a share. I know this because I have a spreadsheet, and you know, I'm anal. You would think--you know, in a world where the market had something to do with what was going on in the actual business end of a company--this would be bad for the price of shares. Yeah, I would too. You know. Until this morning.
However, I cannot login to my account right now, as suddenly and inexplicably, there is too much trading right now. This was new, and I went to pull my spreadsheet and realized things looked wrong, as there was money there that really shouldn't be, since come on, it's not like I'm using logic here in my buying sprees.
This is because AIG tripled in price*.
Let me point this out again. AIG is being investigated for bonus stuff and is going to get ass-raped by the government with government subsidized lube which is also known as sandpaper and this morning the shares reached two dollars each. Bank of America is also still trading above seven (as of the last fifteen seconds), and see, this is why when people look grim over the state of the economy because the DOW looks unhappy, I kind of laugh. The DOW is not unhappy. A whole bunch of hedge fund managers and assorted brokers just bought new BMWs and are making a down payment. Check car sales in the area. Or you know, whose child was arrested recently. I mean, seriously.
*taps fingers on desk*
So far, two hours of high trading and counting. This is hysterical. And I cannot participate in this historical moment. Not that I would. But I do like to boggle at it in real-time.
Example:
American International Group (AIG) is currently being raked fore and aft over that entire messy bonus issue. Late last week, it traded at less than fifty cents a share. I know this because I have a spreadsheet, and you know, I'm anal. You would think--you know, in a world where the market had something to do with what was going on in the actual business end of a company--this would be bad for the price of shares. Yeah, I would too. You know. Until this morning.
However, I cannot login to my account right now, as suddenly and inexplicably, there is too much trading right now. This was new, and I went to pull my spreadsheet and realized things looked wrong, as there was money there that really shouldn't be, since come on, it's not like I'm using logic here in my buying sprees.
This is because AIG tripled in price*.
Let me point this out again. AIG is being investigated for bonus stuff and is going to get ass-raped by the government with government subsidized lube which is also known as sandpaper and this morning the shares reached two dollars each. Bank of America is also still trading above seven (as of the last fifteen seconds), and see, this is why when people look grim over the state of the economy because the DOW looks unhappy, I kind of laugh. The DOW is not unhappy. A whole bunch of hedge fund managers and assorted brokers just bought new BMWs and are making a down payment. Check car sales in the area. Or you know, whose child was arrested recently. I mean, seriously.
*taps fingers on desk*
So far, two hours of high trading and counting. This is hysterical. And I cannot participate in this historical moment. Not that I would. But I do like to boggle at it in real-time.
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*is REALLY CYNICAL about this, if you hadn't noticed*
Apparently, I'm a bit of a capitalist - I swear I'll shut up soon.
- Social Security Wealth is currently an approximately 11 trillion dollar liability for the United States government.
- As it stands the pay-as-you-go system will fail to be sustainable by 2017 when the number of those drawing social security will outstrip those contributing. The trust-fund set up during the Regan administration will be empty by 2041, and future retirees will receive as little as seventy five percent of their defined benefits.
- Social Security reform is thus a matter of necessity.
- Private retirement accounts (PRAs) are actually economically sound PROVIDED they are implemented correctly.
- Pay as you go as it now works: http://gothamgazette.com/graphics/ss_chart.jpg This was great when the ratio of workers was 2:1 not so great when it's headed towards 1:2.
- PRAs are immediately channeled to beneficiaries so you're funding yourself. Not counting on a dwindling ratio to maybe one day sort of fund you in the future.
- Social Security Taxes come with an estimated 2.6% annual return rate, in contrast to the estimated 9.3% return in nonfinancial corporate capital and leading to a loss of real income of 6.7%.
There's more but the details get boring and you can more or less goggle it.
Which isn't to say that you don't have a point and there's nothing *wrong* with PRAs (because you do and there are) - but like... there's sound economics behind the social and financial benefits of PRAs. And yes, stocks are inherently risky but, technically, so are banks and bonds. This is why you diversify your investments.
Re: Apparently, I'm a bit of a capitalist - I swear I'll shut up soon.
(Anonymous) 2009-03-20 06:09 am (UTC)(link)Let me hijack your reply to point out that this is partly the result of United States forgetting that its economic wealth has always been based on a robust influx of immigrant workers.
So it turns out that indulging in random xenophobic feelings, of the 'foreigners stealing our jobs' type as it relates to legal immigration, for over twenty years, is all well and good but also impacts the ratio of workers, as a direct result of such short-sighted policies. Ooops.
To clarify, this goes as far back as the Clinton administration, long before Bush: I myself was among the victims of the anti-immigration policies of both administrations, so I know whereof I speak.
Needless to say this rant is not directed at thearchpoet, but more of a kneejerk reaction on my part.
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*Will go away*
I'm so sorry about spamming this thread.
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